By clicking “I AGREE” [at the end of this document],
you indicate that you understand and intend these terms and conditions to be
the legal equivalent of a signed, written contract and equally binding, and
that you accept such terms and conditions as a condition of viewing any and all
Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the
“Information”). References herein to “Moody’s” include Moody’s
Corporation, Inc. and each of its subsidiaries and affiliates.

Terms of One-Time Website Use

1. Unless
you have entered into an express written contract with Moody’s to the contrary,
you agree that you have no right to use the Information in a commercial or
public setting and no right to copy it, save it, print it, sell it, or publish
or distribute any portion of it in any form.

2. You
acknowledge and agree that Moody’s credit ratings: (i) are current opinions of
the future relative creditworthiness of securities and address no other risk; and
(ii) are not statements of current
or historical fact or recommendations to purchase, hold or sell particular
securities. Moody’s credit ratings and
publications are not intended for retail investors, and it would be reckless
and inappropriate for retail investors to use Moody’s credit ratings and
publications when making an investment decision. No
warranty, express or implied, as the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any Moody’s credit
rating is given or made by Moody’s in any form whatsoever.

3. To the extent permitted by law, Moody’s and its directors,
officers, employees, representatives, licensors and suppliers disclaim
liability for: (i) any indirect, special, consequential, or incidental losses
or damages whatsoever arising from or in connection with use of the
Information; and (ii) any direct or compensatory damages caused to any person
or entity, including but not limited to by any negligence (but excluding fraud
or any other type of liability that by law cannot be excluded) on the part of
Moody’s or any of its directors, officers, employees, agents, representatives,
licensors or suppliers, arising from or in connection with use of the
Information.

4. You agree to read [and
be bound by] the more detailed disclosures regarding Moody’s ratings and the
limitations of Moody’s liability included in the Information.

5. You agree that any disputes relating to this agreement or your use of
the Information, whether sounding in contract, tort, statute or otherwise,
shall be governed by the laws of the State of New York and shall be subject to
the exclusive jurisdiction of the courts of the State of New York located in
the City and County of New York, Borough of Manhattan.​​​

Moody's downgrades five Israeli banks due to weak profitability

18 Apr 2011

Limassol, April 18, 2011 -- Moody's Investors Service has today downgraded by one notch the
deposit ratings of the following five Israeli banks, primarily due
to the banks' weak underlying profitability:

(i) Bank Hapoalim to A2 from A1;

(ii) Bank Leumi to A2 from A1;

(iii) First International Bank of Israel to A3 from A2;

(iv) Israel Discount Bank to A3 from A2; and

(v) Mizrahi Tefahot Bank to A2 from A1.

Moody's has changed the outlook to stable from negative on the ratings
of Bank Leumi, Bank Hapoalim and First International Bank of Israel.
The ratings of Mizrahi Tefahot Bank and Israel Discount Bank have been
placed on review for possible downgrade.

In addition, Moody's has placed on review for downgrade the
Ba1 issuer rating of Israel Credit Card Limited, which is a subsidiary
of Israel Discount Bank.

The full list of affected ratings can be found below.

RATINGS RATIONALE

Moody's says that the rating downgrades are driven by its expectations
that the banks' underlying profitability will remain weak due to
their rigid cost bases. Their moderate earnings-generating
capacity prevents significant capital build-up which, in
turn, hinders loss-absorption capacity within the context
of (i) highly concentrated loan books; and (ii) concerns over the
performance of the housing market. Moody's also notes that
similarly rated global peers display a stronger mix of earnings and capital
cushions.

Moody's adds that notwithstanding the downgrades, Israeli
banks display healthy liquidity profiles and stable franchises operating
in a well-regulated environment. The rating agency also
notes that the deposit ratings of all five banks continue to benefit from
significant uplift as a result of its assumptions on systemic support.
The capacity and willingness of the authorities to support its banking
system, in case of need, remains strong.

Moody's says that the country's improved economic conditions
provide the basis to change the outlook to stable from negative on three
of the five banks. Israel Discount Bank and Mizrahi Tefahot Bank
will also benefit from the more favourable economic environment.
However, Moody's has placed their ratings on review for further
possible downgrade to assess the banks' more pronounced challenges
on cost efficiency (in the case of Israel Discount Bank) and on housing-market
exposures (in the case of Mizrahi Tefahot Bank).

BANK HAPOALIM

Bank Hapoalim's long-term local and foreign-currency
deposit rating has been downgraded to A2 from A1, due to Moody's
downward reassessment of the bank's standalone financial strength.
This is reflected in the lowering of the bank's baseline credit
assessment (BCA) to Baa2 from Baa1, the lower of two options within
the Bank Financial Strength Rating (BFSR) of C- assigned to the
bank. In addition the bank's Prime-1 short-term
deposit rating has been affirmed and the outlook on all the ratings has
been changed to stable from negative.

The following debt of Hapoalim International N.V.,
the wholly-owned special purpose vehicle of Bank Hapoalim,
has also been downgraded and the outlook was changed to stable from negative:

Bank Leumi's long-term local and foreign-currency
deposit rating has been downgraded to A2 from A1, due to Moody's
downward reassessment of the bank's standalone financial strength.
This is reflected in the lowering of the bank's BCA to Baa2 from
Baa1, the lower of two options within the bank financial strength
rating (BFSR) of C- assigned to this bank. The bank's
Prime-1 short-term rating has been affirmed and the outlook
on all the ratings has been changed to stable from negative.

FIRST INTERNATIONAL BANK OF ISRAEL

The long and short-term local and foreign-currency deposit
ratings of First International Bank of Israel (FIBI) have been downgraded
to A3/Prime-2 from A2/Prime-1, due to Moody's
downward reassessment of the bank's standalone financial strength.
This was reflected in the downgrade of the bank's BFSR to D+
from C-, which now maps to a BCA of Baa3, instead of
Baa2 previously. The outlook on all ratings has been changed to
stable from negative.

ISRAEL DISCOUNT BANK

The long and short-term local and foreign-currency deposit
ratings of Israel Discount Bank (IDB) have been downgraded to A3/Prime-2
from A2/Prime-1, due to Moody's downward reassessment
of the bank's standalone financial strength. This was reflected
in the downgrade of the bank's BFSR to D+ from C-,
which now maps to a BCA of Baa3, instead of Baa2 previously.

In addition, the bank's A3 long-term deposit rating
has been placed on review for possible further downgrade due to concerns
regarding the bank's high cost structure. The bank's cost
to income ratio was 75% in 2010. This materially hinders
the build- up of a capital cushion to protect the institution against
event risks that can stem from its high single-party exposures.
The purpose of the review is to assess management's plan to strengthen
efficiencies and reduce its expenditure base to improve profit generation.

MIZRAHI TEFAHOT BANK

Mizrahi Tefahot Bank's (MTB) long-term local and foreign-currency
deposit rating has been downgraded to A2 from A1, due to Moody's
downward reassessment of the bank's standalone financial strength.
This is reflected in the lowering of the bank's BCA to Baa2 from
Baa1, which is the lower of two options within the BFSR of C-
assigned to this bank. In addition, MTB's A2/Prime-1
long and short-term deposit ratings and its BFSR of C- have
been placed on review for possible further downgrade.

In placing the bank's ratings on review for possible downgrade,
Moody's is highlighting the risks associated with the bank's
elevated exposure to the housing market (58% of total loans) in
a context of rapidly rising house prices in recent years (up 60%
in nominal terms since the middle of 2007). During the review period,
Moody's will assess the bank's resilience to these risks and
will examine whether they are fully captured by the C- BFSR category,
currently shared with the two largest banks in Israel.

ISRAEL CREDIT CARD

Israel Credit Card's Ba1 issuer rating has been placed on review
for possible downgrade, in line with the downgrade and ongoing review
on the ratings of its controlling shareholder, Israel Discount Bank.

Moody's says that the company's Ba1 issuer rating incorporates
some rating uplift based on assumptions of support from its parent bank.
Therefore, any further downward adjustment in the parent's
rating may lead to a lowering of Israel Credit Card's rating.

PREVIOUS RATING ACTIONS AND METHODOLOGIES

The principal methodologies used in this rating were Bank Financial Strength
Ratings: Global Methodology published in February 2007, Incorporation
of Joint-Default Analysis into Moody's Bank Ratings: A Refined
Methodology published in March 2007, and Moody's Guidelines for
Rating Bank Hybrid Securities and Subordinated Debt published in November
2009.

Moody's previous rating action on Bank Hapoalim was on 12 March
2009, when the outlook on the bank's senior and subordinated
ratings was changed to negative.

Moody's previous rating action on Bank Leumi was on 12 March 2009,
when the bank's deposit ratings were downgraded, and retained
their negative outlook.

Moody's previous rating action on First International Bank of Israel
was on 12 March 2009, when the bank's ratings were downgraded
and retained their negative outlook.

Moody's previous rating action on Israel Discount Bank was on 12
March 2009, when the bank's ratings were downgraded and retained
their negative outlook.

Moody's previous rating action on Mizrahi Tefahot Bank was on 16
December 2008, when the bank's outlook on the bank's
deposit ratings was changed to negative from stable.

Moody's previous rating action on Israel Credit Card Limited was
on 21 January 2008 when ratings were first assigned to the company.

Headquartered in Tel Aviv, Israel, Bank Hapoalim reported
total consolidated assets of NIS320.9 billion (US$90.0
billion) as of end December 2010.

Headquartered in Tel Aviv, Israel, Bank Leumi reported total
consolidated assets of NIS328.2 billion (US$92.1
billion) as of end December 2010.

Headquartered in Tel Aviv, Israel, First International Bank
of Israel reported total consolidated assets of NIS100.68 billion
(US$28.3 billion) as of end December 2010.

Headquartered in Tel Aviv, Israel, Israel Discount Bank reported
total consolidated assets of NIS185.8 billion (US$52.16
billion) as of end December 2010.

Headquartered in Tel Aviv, Israel, Mizrahi Tefahot Bank reported
total consolidated assets of NIS133.3 billion (US$37.4
billion) as of end December 2010.

Headquartered in Tel Aviv, Israel, Israel Credit Card reported
total consolidated assets of NIS8.6 billion (US$2.4
billion) as of end December 2010.

REGULATORY DISCLOSURES

Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.

The rating for Mizrahi Tefahot Bank was initiated by Moody's Investors
Service and was not requested by the issuer.

Mizrahi Tefahot Bank participated in the credit rating process.
The rated entity or its related third party, if any, did provide
the rating committee access to the books, records and other relevant
internal documents of the rated entity.

Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.

The rating has been disclosed to the rated entities or its designated
agents and issued with no amendment resulting from that disclosure.

Moody's Investors Service may have provided Ancillary or Other Permissible
Service(s) to the rated entity or its related third parties within the
three years preceding the Credit Rating Action. Please see the
ratings disclosure page www.moodys.com/disclosures on our
website for further information.

Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.

Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.

The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.

Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.